[Code of Federal Regulations]

[Title 45, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 45CFR74.27]



[Page 222]

 

                        TITLE 45--PUBLIC WELFARE

 

           SUBTITLE A--DEPARTMENT OF HEALTH AND HUMAN SERVICES

 

    PART 74_UNIFORM ADMINISTRATIVE REQUIREMENTS FOR AWARDS AND SUBAWARDS TO INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, OTHER NONPROFIT ORGANIZATIONS, AND 

COMMERCIAL ORGANIZATIONS--Table of Contents

 

                    Subpart C_Post-Award Requirements

 

Sec. 74.27  Allowable costs.



    (a) For each kind of recipient, there is a particular set of Federal 

principles that applies in determining allowable costs. Allowability of 

costs shall be determined in accordance with the cost principles 

applicable to the entity incurring the costs. Thus, allowability of 

costs incurred by State, local or federally-recognized Indian tribal 

governments is determined in accordance with the provisions of OMB 

Circular A-87, ``Cost Principles for State and Local Governments.'' The 

allowability of costs incurred by nonprofit organizations (except for 

those listed in Attachment C of Circular A-122) is determined in 

accordance with the provisions of OMB Circular A-122, ``Cost Principles 

for Nonprofit Organizations'' and paragraph (b) of this section. The 

allowability of costs incurred by institutions of higher education is 

determined in accordance with the provisions of OMB Circular A-21, 

``Cost Principles for Educational Institutions.'' The allowability of 

costs incurred by hospitals is determined in accordance with the 

provisions of appendix E of this part, ``Principles for Determining 

Costs Applicable to Research and Development Under Grants and Contracts 

with Hospitals.'' The allowability of costs incurred by commercial 

organizations and those nonprofit organizations listed in Attachment C 

to Circular A-122 is determined in accordance with the provisions of the 

Federal Acquisition Regulation (FAR) at 48 CFR part 31, except that 

independent research and development costs are unallowable.

    (b) OMB Circular A-122 does not cover the treatment of bid and 

proposal costs or independent research and development costs. The 

following rules apply to these costs for nonprofit organizations subject 

to that Circular.

    (1) Bid and proposal costs. Bid and proposal costs are the immediate 

costs of preparing bids, proposals, and applications for Federal and 

non-Federal awards, contracts, and other agreements, including the 

development of scientific, cost, and other data needed to support the 

bids, proposals, and applications. Bid and proposal costs of the current 

accounting period are allowable as indirect costs. Bid and proposal 

costs of past accounting periods are unallowable in the current period. 

However, if the recipient's established practice is to treat these costs 

by some other method, they may be accepted if they are found to be 

reasonable and equitable. Bid and proposal costs do not include 

independent research and development costs covered by paragraph (b)(2) 

of this section, or pre-award costs covered by OMB Circular A-122, 

Attachment B, paragraph 33 and Sec. 74.25(d)(1).

    (2) Independent Research and Development costs. Independent research 

and development is research and development which is conducted by an 

organization, and which is not sponsored by Federal or non-Federal 

awards, contracts, or other agreements. Independent research and 

development shall be allocated its proportionate share of indirect costs 

on the same basis as the allocation of indirect costs to sponsored 

research and development. The cost of independent research and 

development, including their proportionate share of indirect costs, are 

unallowable.